WITH LITTLE MOVEMENT SINCE DOHA, S&D REVIEW EXTENDED TO END-2002

Officially adopted at the 31 July General Council meeting (see related story, this issue), WTO Members agreed on 24 July to a report that, inter alia, extends a review of special and differential treatment for developing countries (S&D) until 31 December 2002 (TN/CTD/3, searchable at http://docsonline.wto.org). Despite having found 'consensus' on the key issue of a timeline, other contentious questions have been left unresolved, leaving an ambitious agenda for the special session of the Committee on Trade and Development (CTD) when it resumes after the summer break.

Developing countries hold out for earlier timeline

At both the 24 July CTD special session and the 31 July General Council session, developing countries noted their disappointment in missing the Doha-mandated target of reporting "with clear recommendations for a decision by July 2002" on the review of special and differential treatment. United in their feelings of frustration on the perceived lack of will to move this agenda item forward, they proved able to withstand attempts by a number of developed countries to push the new timeline into 2003 (see BRIDGES Weekly, 24 July 2002).

The EC had initially attempted to force a 31 March 2003 deadline (thus aligning this issue with the agriculture and services negotiations). However, many countries, such as those in the Africa and least- developed country (LDC) groupings, remained adamant on not looking past the end of 2002. Some Members, such as the Philippines and St. Lucia, reportedly alluded to the fact that, in light of the daunting agenda ahead, December 2002 would likely be a 'soft' or 'interim' deadline. Canada and Norway attempted to broker a compromise, suggesting middle to late February 2003, but due to stiff resistance from developing countries the 31 December date prevailed. The US, though it favoured a later date, said it was "willing to be flexible", but was of the mind that year-end 2002 was simply unrealistic if all elements of the report were to be dealt with.

Agreement in principle, but key details remain unclear

A scarce number of items from the various proposals received explicit mention in the final report, and those that did were wrapped in ambiguity. The only proposed element to receive outright support was that of a monitoring mechanism. Support for this initiative, however, was tempered by the fact that Members remained far apart on the functions and structure that such a mechanism would have. This debate was evidenced in the contrasting language that appeared in the different drafts. The first draft put the responsibility to elaborate "the structure and terms of reference" in the sole hands of the CTD special session, while the second draft put the responsibility in the hands of the special session to elaborate on the "functions and structure" for the General Council's "consideration and approval". Members finally settled on the special session taking up responsibility for elaborating "the functions, structure, and terms of reference" for the General Council's approval.

Another item to garner qualified support was the Africa Groups' proposal on the inclusion of some criteria for 'technical and financial assistance and training' in future technical assistance plans. Again, ambiguity found its way into the language, clouding the potential future impact, as the provision ended with the caveat, "without prejudice to further discussions of the relevant Annexes in the Special Sessions of the CTD." This, speculated one trade expert, could leave it open to have said criteria "watered down" from what is currently in the Africa Groups' proposal (TN/CTD/W/3/Rev.2, not yet de-restricted).

How to organise the next four months

Now that the deadline has been pushed from 31 July to 31 December, the next challenge lies in finding a way of organising the future work programme so as to avoid a similar deadlock as that which emerged in the months preceding 31 July. With almost 90 proposals on the table, and only four formal meetings scheduled between September and December, Members will be hard-pressed to look at which issues must be prioritised and which may perhaps have to be left until later in the process (perhaps even until 2003).

This debate ties into the other key stumbling block that held up agreement on the current report -- that of the two tracks of agreement- specific proposals, on the one hand, and cross-cutting (institutional) ones, on the other. The language in the final report holds closely to the second draft (see BRIDGES Weekly, 24 July 2002, link above) in that it de-links the cross-cutting issues from the 'best-endeavour' commitment to submit responses to the agreement-specific proposals (due by 31 October 2002). This is seen as a gain by most developing country Members, who did not want to see the broader (cross-cutting) discussions on S&D used to delay meaningful movement on the agreement- specific proposals made to date. This, speculated one trade expert, is what some developing countries mean when they refer to 31 December as an interim date -- that is, an interim date to see movement on the agreement-specific issues (which many feel is the only area truly mandated in Doha) before moving onto the broader issues.

According to CTD special session Chair Ambassador Ransford Smith (Jamaica), "[the report] preserves the opportunity for Members who so wish to make cross linkages between the two areas of work and to make inputs from one to the other as they consider appropriate." Early speculation has indicated that this will be facilitated by having agreement-specific issues followed by cross-cutting issues as standing agenda items for future CTD special session meetings. Another procedural tool to be used to help expedite some of the work will be the 'clustering' of similar issues for discussion.

One element that a developing country delegate said would have to be forthcoming if this special and differential treatment review was really going to help make the Doha agenda a development agenda, was the need for a demonstration of the political will and commitment on behalf of the developed countries to move ahead unilaterally on this matter. Many developing countries feel that they 'paid' in Uruguay for what they thought would be 'commercially valuable' derogations from the rules (as in the 155 S&D provisions scattered throughout the WTO agreements). However, most of these derogations, they continue, have since proved relatively useless. As such, they do not intend to 'pay' for them again by trading them off against agenda items which they do not feel are beneficial for them (i.e. environment, investment, competition).

Despite those sentiments, recent comments from EC and US representatives indicate that these countries in fact do expect S&D amendments to factor into the many decisions to be taken at the 5th Ministerial Conference (and thus tied to decisions in more contentious areas, such as environment, competition, investment, industrial tariffs, etc). In speaking to the Trade Negotiations Committee (the body overseeing the negotiations) on 18-19 July, EC Director General for Trade Peter Carl said that he expects this matter to "be an important element in the ensemble of decisions to be taken at Cancun."

Many developing country delegates have sounded the alarm bell that a lack of meaningful progress on S&D will most certainly result in a slowdown of all other negotiating tracks of interest to developed countries -- thus most likely making it impossible to complete the round in the time allotted to Members by their Ministers in Doha (1 January 2005).

The special session of the Committee on Trade and Development resumes on 16 September. It is also currently scheduled to meet again on 7 & 9 October and 6 December -- although sources expect more sessions to be added once the WTO returns from its summer break in the first week of September.

ICTSD reporting.